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07 Feb 2019 | 07:40

Compass Group upgrades outlook as strong new business generation lifts growth

Compass Group upgraded its outlook for full year, expecting organic growth to come in slightly above the middle of its guidance as strong levels of new business wins bolstered first-quarter revenues.

Compass' organic revenue for the three months to 31 December 2018 grew by 6.9%, supported by growth in North American, Europe and Rest of the World of 8%, 6.4% and 2.8%, respectively.

The revenue growth was driven by strong levels of new business wins, continued good retention rates and bolstered by the impact of the new UK Defence contracts and a positive sporting events calendar, the company said.

Currency movements, compared to the same quarter last year, had a positive translation impact on revenues and profit in the quarter of £107m and £10m respectively, the company said. 'If current spot rates were to continue for the remainder of the year, foreign exchange translation would positively impact 2018 revenue by £508m and operating profit by £43m,' it added. In the first quarter, the group spent £197m on acquisitions in North America.

'We had an excellent start to the year and now expect to be slightly above the middle of our target 4-6% organic growth range for the full year, with modest margin progression, Compass Group said.

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